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Does digital transformation impact green total factor productivity? Evidence from national big data comprehensive pilot zones in China

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  • Wen, Jun
  • Hai, Hongbo
  • Zhang, Yan
  • Chen, Zehua
  • Li, Lingxiao

Abstract

As digital transformation plays an increasingly vital role in corporate reform, whether digital transformation can influence corporate green productivity levels has become a critically important research issue. This study utilizes the quasi-natural experiment of China's Big Data Comprehensive Pilot Zones policy to analyze its effects and explore the underlying mechanisms. This study employs a multi-period difference-in-differences methodology, analyzing data from Chinese listed companies spanning 2008 to 2022. The empirical results demonstrate that digital transformation significantly improves enterprises’ GTFP, a finding that remains robust after parallel trend tests, placebo tests, and the exclusion of confounding factors. Our mechanism analysis reveals that digital transformation enhances GTFP through two primary channels: (1) an innovation effect, evidenced by a notable increase in attributes of green patents, and (2) a structural effect, driven by improved corporate specialization. These conclusions hold even after alternative measurement approaches are used. Furthermore, a heterogeneity analysis indicates that digital transformation demonstrates significantly stronger effects on green total factor productivity in state-owned enterprises and eastern-region firms compared to other enterprise types and geographic locations. Interestingly, enterprises that initially express limited willingness to engage in digital transformation exhibit more substantial improvements than early adopters due to policy incentives and technology spillovers. This study provides actionable insights for synergizing digital and green transitions, offering policymakers and corporate leaders empirical evidence of the value of harnessing digital upgrading as a sustainable driver of environmental development.

Suggested Citation

  • Wen, Jun & Hai, Hongbo & Zhang, Yan & Chen, Zehua & Li, Lingxiao, 2025. "Does digital transformation impact green total factor productivity? Evidence from national big data comprehensive pilot zones in China," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 2207-2221.
    • Handle: RePEc:eee:ecanpo:v:86:y:2025:i:c:p:2207-2221
    DOI: 10.1016/j.eap.2025.05.058
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    1. Gan, Yufei & Song, Qingyu & Lu, Zhaoying, 2025. "Does digital transformation decrease firms’ natural dependence?," Finance Research Letters, Elsevier, vol. 86(PD).

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